In its pursuit of heightening financial security measures post Libra announcement, the US lawmakers are considering imposing a nationwide ban on issuance of cryptocurrencies by large technology corporations.
Reuters released a report on Monday with its interpretation of the draft bill being circulated by the Democratic party. It states that the U.S. House of Representatives have proposed to put a stop to big technology corporations from playing the role of financial institutions.
What does the draft bill specify?
Under the cryptocurrencies section of the draft bill, the proposal debars large tech platforms from issuing, circulating or handling digital currencies as a medium of exchange or a store value. Failure to do so may result in a fine as high as one million dollars ($1 million) every day of violation of the rule.
Moreover, the bill specifically defines digital assets as currencies, including but not limited to coins, tokens or any form of virtual asset class, that are regulated and exchanged by means of decentralized and distributed archives or blockchain technology.
It also goes on to specify which companies fall under this category. According to the draft bill, any technology firm yielding twenty five billion dollars ($25 billion) in its yearly revenue is required to comply with this regulation.
The profound implications of the bill
In case the proposal is approved, it would mean a crippling blow for a tech giant like Facebook whose Libra launch preparations are in full swing. Besides, companies like Mastercard, Paypal or Uber, who have endorsed Libra and plan to play a major role in governing it, would also be hit hard.
The sensational news is released just a week after President Trump taking a dig at the credibility of cryptocurrencies.
While the proposal is still in its early phases of inception, it is expected to receive heavy censure from the Republic members, given their keen interest in promoting innovation and a digital economy in the country.